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From: Jared Hamilton
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Exclusive Blog Posts

Top 6 Things Car Dealers Do To Make Car Buying Difficult

Top 6 Things Car Dealers Do To Make Car Buying Difficult

[youtube https://www.youtube.com/watch?v=3R7Y3kZIDVg] Your Turn To Drive discusses Top 6 Things Car Dealers Do To Make Car Buying Difficult.  Jim D…

Choose the correct CRM for your dealership OR pay dearly

Choose the correct CRM for your dealership OR pay dearly

With all the CRMs on the market today, finding the right one for your dealership is becoming more challenging than ever. There have been massive changes in…

5 Benefits of Using Google AdWords Click-to-Message Ad Extensions

5 Benefits of Using Google AdWords Click-to-Message Ad Extensions

Looking for a new way to win over people more likely to send a text message than to call? Set up this free message extension for your text ads on the Googl…

Must-See NADA 100 Expo Displays for Fixed Ops

Must-See NADA 100 Expo Displays for Fixed Ops

New Orleans is ramping up for the 100th anniversary of NADA, and the convention promises to be outstanding. You’ll be entertained at the NADA100 Carn…

Why Social Media Marketers Won’t Replace Your Sales Team

Why Social Media Marketers Won’t Replace Your Sales Team

Social media is changing the marketing profession in remarkable ways. According to the Public Relations Society of America (PRSA), the social media analyti…

Pre-Owned Inventory Values continued

Since our post last week regarding pre-owned inventory scarcity and higher prices, I have been asked to speculate as to the reasons and effects, so here goes.  To my mind the answer to why prices are increasing at such a fast pace is "Supply and demand.”  Through the recession, average new car sales per year fell from 16 million plus, to under 11 million.  Less new cars being sold means fewer potential trade-ins, which in turn is causing this shortage of used cars on offer and consequently less for dealers to sell.  Secondly due to the recent tsunami in Japan and the resultant shortage of new car product from the Japanese mainland manufacturers many of their franchise dealers have turned to Pre-Owned car sales to try and make up for the profit shortfalls.  Unfortunately many of these dealers are not practised Pre-Owned professionals and so tend to over pay just to get something to sell.  But that has caused wholesale price rises without a commensurate Retail driven price increase, thus putting margins for all dealers under pressure.

These two factors above when translated via the old laws of supply and demand has even led to an increased demand for types of cars that have typically been considered less than desirable on a normal basis – for dealers realize that you can’t make a profit from a vacant space on your lot.  That thinking in itself whilst technically correct can lead to long or medium term unplanned losses that can wipe out any short term profit gains.  The wrong stock is always the wrong stock, even when acquired for the right reasons.

If you would like further information on how to minimize the risks and benefit from the opportunities please don't hesitate to call  or email me.  You can follow us on Twitter @profitbyaction .  If you don’t already use Twitter then click on this link and register for free http://twitter.com/#!/search/realtime/%40profitbyaction then you can be part of the conversation.

Garry Palmer

garryp@aseamericas.com

 

 

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